Private petro majors gear up for ATF mart foray

Private petroleum majors are gearing up for a foray into the domestic aviation turbine fuel (ATF) market as the monopoly of state-owned companies, Indian Oil Corporation, Hindustan Petroleum Corporation and Bharat Petroleum Corporation, comes to an end this April.

The other reason for Reliance Industries and Essar Oil to vie for distribution of this high-quality fuel is that several new airlines, foreign and domestic, are entering the market.

"We are planning a foray into the ATF market and are awaiting necessary clearances. Reliance has already acquired the marketing rights of ATF from the ministry of petroleum and natural gas and is exporting premier quality ATF to various countries," said an official spokesperson of Reliance in Mumbai.

Reliance has 3.6 million metric tonne per annum (MTPA) ATF production capacity at its Vadinar refinery in Jamnagar district of Gujarat. It has been exporting most of its as private companies were not allowed to sell ATF in the domestic market.

The civil aviation ministry decided last month to acquire the entire fuel supply hydrant systems and other related infrastructures in the major airports and refuelling centres for aircrafts at a book value from the Airport Authority of India (AAI). Subsequent to the acquisition, all ATF-producing companies would be given equitable access to the infrastructure.

While Reliance officials denied to divulge further information, sources close to the company said Reliance had recently submitted technical bids for setting up refuelling stations at major airports of the country such as Delhi, Mumbai, Kolkata along with 72 airports where the AAI wants to set up aviation fuel stations.

Arch rival Essar has also filed an application with the ministry seeking its permission to distribute ATF in India. "We will start sales of ATF only after our refinery at Vadinar is commissioned by July, 2006," said an Essar spokesperson.

It also has been learnt that Oil and Natural Gas Corporation (ONGC) has obtained permission to distribute ATF in India as it has commissioned an ATF production cell at its refinery in Mangalore. ONGC officials, however, could not be reached for comments.

"The aviation market is booming. There is a major expansion by domestic airlines such as Jet Airways or Sahara, while new airlines such as Kingfisher and Royal Airlines, Go Airways are going to kick off services shortly," said an official with BPCL, which holds 22 per cent share of the domestic fuel market.

"The demand for aviation fuel has witnessed over two-fold growth in Ahmedabad alone. At present, we supply over 1800 kilolitre of aviation fuel per month compared with around 900 to 1000 kilolitre in the last year. Demand for aviation fuel has increased substantially and is expected to go further with more airlines willing to operate from Ahmedabad," said Sanjeev Vasnik, chief airport terminal manager, Indian Oil, Gujarat.